Russia has announced an investment package of around $14Bn for offshore gas pipeline in Pakistan. This was announced by a Russian delegation visiting the petroleum division headed by Vitaly A Markelov, Deputy Chairman of Gazprom Management Committee. The officials said that Gazprom plans to invest around $10Bn in the offshore gas pipeline project, $2.5Bn in North South pipeline project and the remaining in building underground storages in Pakistan.
Engineering Post broke this news many months back revealing that Russia is interested in investing in offshore gas pipeline.
An agreement was signed between Inter State Gas Systems (ISGS) Managing Director Mobin Saulat and Markelov. As part of this agreement Gazprom will conduct a feasibility study for the Gas pipeline at its own cost with no financial implications on Pakistan.
The $10Bn gas pipeline would be built from Iran to Pakistan (Gawadar). Russian companies will also build a gas pipeline from Karachi to Lahore. Russia holds and manages huge gas reserves in Iran and is planning to export it to Pakistan and India. It will export 500 million cubic feet per day to Pakistan in the initial stages which will increase to 1 billion cubic feet per day. Pakistan will be able to accrue transit fee once the pipeline is complete.
Russia is seeking to gain a foothold in the fuel starved market of Pakistan to benefit from the potential industrialization under CPEC. The pipeline would follow an integrated approach including other ancillary projects such as underground gas storage, desalination and other power project
